VENDOR SELECTION
What are the main reasons to outsource? One of the main drivers for us is lacking internal resources. We’re a small company, and we don’t have any manufacturing or packaging capabilities ourselves, so we have to outsource our activities. We have resources internally for some activities. Take, for example, QA (quality assurance) – we don’t have enough resources to do all the current QA work ourselves, so we outsource some to third parties, and that’s mostly due to a lack of capacity. We don’t outsource because activities are cheaper outside; one of the main, and so far only, drivers for us to outsource our work is that we do not have capacity in-house.
If your company grows and you have more internal resources, do you think you will outsource less? I think if the company grew, there would still be some aspects that we would outsource, because if the company grew and the activities grew, our workload would grow also, so we would still have some uncovered needs to outsource at first. As a second point, we would also need to outsource some due to lack of specific knowledge. For instance, we outsource legal work around patenting – that’s where we need consultancy, so ultimately, we need to bring the knowledge in-house. That’s also due to our company structure and size because a large company does not have the same issue with resources.
What are the key challenges when it comes to vendor selection? If you are talking about selection and qualification of new vendors, the first challenge is that the qualification paperwork is never going to give the full picture. They always provide the documentation, but the day-to-day experience could be very different from what you read. For newly qualified vendors, there is a gap between what you can audit and the day-to-day experience afterwards. Second, if you select from a panel of vendors,
you get used to your vendors the more you work with them, so you know their strengths and weaknesses and whether they’re best qualified for the work you want to outsource. If you have a vendor that you would select for financial reasons or the right network or flow, the next challenge would be to know your vendor and put some measures in place to proactively fill the gaps in the vendor’s organisation, more or less knowing
in which areas they are going to struggle to provide the required service.
What are the signs that vendors are going to fail? You do your research and may have a certain understanding of where you will need to be especially careful, then keep a close eye on routine reports or routine procedures that you know may not play to their best strengths or ability.
How do you keep track of this?
Of course, the first primary source should be the quality records; any investigation is recorded, and for any quality, there should be a record in our quality systems, and that record should be the first place to go to in order to see what’s working and what’s not. Again, we are a small company, so we don’t have too many vendors or a big pipeline, so you can keep the oversight without using too sophisticated vendor-assessment tools or vendor-evaluation tools. In clinical supplies and distribution, we don’t have too many suppliers.
What are your key strategies for managing diverging expectations?
The first would be to be clear about what the expectations are. It’s OK that we’re different companies and have different goals; we just ‘get married’ for a project and know that this work in common should be fulfilling for both parties. That means we get a supplier that provides activities we’re not able to provide for ourselves, and they get revenue, but that’s the most obvious goal. Some vendors will be keen on developing more specific aspects like clinical distribution or manufacturing capabilities, so this is something that you have to know or understand by talking to your point of contact. For me, it’s an informal discussion and experience. There’s not a real roadmap that says: “Your goals are this and our vendors’ goals are that.”
One of the important things for me in clinical supplies is to know what the processes of your vendors are. We, as a firm, don’t necessarily want to impose our processes on the vendors because that could cause a disruption in the vendors’ processes to adapt to ours, and that may not be the best idea. We’re flexible enough to adapt to our partners’ processes and forms, so knowing the vendors’ goals and areas of convergence is as important as knowing how they operate the business. Disrupting process could negatively
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